Angie's List: Paper or Plastic? The best way to pay for home improvements
Financing a home improvement project can be stressful. You can help eliminate some of that stress simply by the way you choose to pay for the project. According to Angie's List, the consumer review website, the best way to pay for projects like this is by credit card.
Angie Hicks is the creator of Angie's List, and she points out that not all plastic is created equal.
"A credit card and a debit card are not the same thing. Remember, your debit card is connected to your checking account and the money goes out automatically. By using a credit card, you get extra protection because it takes longer for you to pay that bill," says Hicks.
Although some methods may be better than others overall, if you find yourself in a position to only choose one, there are certain approaches you can take to ensure a more successful transaction.
The Federal Trade Commission claims that a contractor who only offers the option of paying in cash is usually not as reputable as one who has other payment options available.
TIP: Although paying in cash in not the best option, you can make it a little safer by signing a contract of a receipt with each cash transaction. If cash payments are necessary, choose smaller payment increments throughout the course of the project to ensure that the job is done according to your preferences.
Paying with a check can better ensure that your payments are going toward the project. If a contractor asks you to write a check for a payment higher than 1/3 of the projects overall cost, it should be cause for concern.
TIP: If you pay a contractor with a personal check, ask the contractor to indicate what each payment will be used for and write that in the memo section of the check. Also, be sure to scan a photo copy of the check and keep it for your records.
Of all the payment methods available, paying with a credit card is usually the safest and most effective option. With credit card payments, you can conveniently organize regular payments throughout the course of the project through direct deposit options. Paying by credit card can also provide more substantial proof that you paid the contractor for the job in the event that the project is not completed according to your standards or it is not completed at all.
TIP: When paying with a credit card, always opt for timed increments and make sure to cancel these transactions immediately if the project is not completed as expected.
Your debit card will not offer the same consumer protections as a credit card. Although credit cards and debit cards look almost identical, financial transactions made with a debit card are just like writing a check. Once a transaction takes place, the money can be transferred out of the account almost immediately.
TIP: Find a contractor who meets your expectations in terms of quality and accepts your preferred method of payment.